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Tuesday, 8 August, 2000, 14:42 GMT 15:42 UK
Psion to float Symbian
Symbian logo and a range of products
Symbian targets a range of product areas
UK handheld computer maker Psion plans to float Symbian, its mobile phone joint venture.

Psion's most important asset is widely perceived to be its 28% stake in Symbian, the joint venture with Nokia, Motorola, Ericsson and Japan's Matsushita.

The joint venture develops the Epoc operating system, which allows internet access on mobile phones. It is designed to run mobile phones, communicators and personal digital assistants.

Symbian shareholders have now decided to float the joint venture, subject to stock market conditions and the establishment of high-volume products, Psion said.

Observers say that this is unlikely until late next year. Some estimate Symbian could be valued at 5bn, but others point out that it is difficult to place a value on the joint venture.

"What are the contracts going to be? And will the key customers continue to be the major shareholders? These issues are relevant to the value of Symbian," Stuart Jeffrey of HSBC Securities said.

Symbian's high-powered backers make the firm a direct competitor of Microsoft and its Windows CE software.

The latest software is still being tested and is now expected to be released in the third quarter of this year.

Symbian is not expected to break even until 2002 or later.

No further details of the float were released.

Bumper profits

A Symbian flotation raises questions about how much Psion will be valued at if its mobile joint venture is spun off.

"The remaining business is a very small part in terms of value," HSBC's Stuart Jeffrey said.

The announcement came as Psion - now valued at 2.6bn - reported first half pretax profits of 3m.

This compares with 100,000 the previous year.

The increase in profits can be attributed to demand for palmtop computers. Sales of the Psion Revo and Series 5mx were particularly strong.

Its profits were hurt by the weakness of the euro against sterling and investment in new products.

If the cost of Symbian and exceptionals are excluded, its pre-tax profits were 7.7m.

Psion's turnover in the first half of the year was 94.3m compared with 64.2m last year.

But the company warned that sales at its Connect division, which makes card modems, may fall.

This is before the launch of products using Bluetooth, a system that links computers via radio.

"The results for the first half of this year demonstrate that Psion has made good progress in implementing the mobile internet strategy we have articulated over the last year," chairman David Potter said.

Shares in Psion rose 2.7% to 683 pence in early morning trade.

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See also:

26 Apr 00 | Business
Psion rises on Sony deal
01 Feb 00 | Business
The Psion factor
02 Mar 00 | Business
Psion opts for mobile web
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